Microsoft said on Tuesday it is paying a hacking expert more than $100,000 for finding security holes in the Windows OS.

The software maker also released a much anticipated update to Internet Explorer, which it said fixes a bug that made users of the world's most popular browser vulnerable to remote attack.

James Forshaw, a researcher at London-based security consulting firm Context Information Security, won Microsoft's first $100,000 bounty for identifying a new "exploitation technique" in Windows, which will allow it to develop defenses against an entire class of attacks, the software maker said on Tuesday.